A good _________ enables an accounting manager as well as auditors to follow the path of the data recorded in transactions form the initial source. 14. A control activity of an internal control system that focuses on structuring work assignments among employees so that one employee's work activities serve as a check on those of another employee is called ______________. 15. What kind of analysis should be performed when considering if an internal control procedure should be implemented?
The purpose of the SOX Act in response to the fraudulent and misleading activities of large corporations such as Enron, Health South, Xerox, Global Crossing, and almost one thousand publicly traded companies. Fraud is defined as “a dishonest act by an employee that results in personal benefit to the employee at a cost to the employer” (Kimmel, Weygandt, & Kieso, 2011). The afore mentioned companies and many others committed fraud when they willingly published false and/or deceptive financial statements making their companies look like they were making huge profits, therefore causing their stock prices to soar and enticing the public to by more and more shares of their companies. Unfortunately, when the truth came out, the fraudulent actions of a few resulted in the loss of almost $5 trillion of stock market value and an undetermined amount for stockholders. Because of this fraudulent action, Congress had no choice but to intervene and pass legislation that would curtail this illegal
Under Section 404 of the act, these findings must detail any uncovered control deficiencies or instances of employee fraud, and must also be reviewed and attested by the registered accounting firm. The authors of the report must certify that the report does not contain any false information, misleading statements or significant omissions, and that the financial statements and information included in the report accurately represent the financial condition of the company. Under Section 401 of the act, this representation must account for both balance and off-balance sheet debts, obligations and transactions in order to facilitate maximum transparency for shareholders (Nikolas, Daniel. Nd Effects of the Sarbanes-Oxley Act). The act serves as a guideline and governs what an accountant should and should not do when reporting financial flows.
Accounting requires that all transactions be recorded to ensure accuracy when giving financial details to board members, stock holders, and the IRS for tax purposes The income statement posts revenues and expenses. The income statement
The audit report must show report that management has established and maintained internal controls for financial reporting. Certification of each annual report must be verified by the executive offers of the company, the report must show that they maintained established internal controls. The offices of the company must include in their reports evaluation of the internal controls effectiveness. Included in the reports, there must be reports of fraud that may have an effect that have any effect on the internal controls. The Sarbanes-Oxley Act contains 11 titles that describing rules and requirements for financial reporting in the United States (Wang,
It is a review of management and how operating procedures work. How effective and efficient the procedures are for the company. Although operational audits reveal possible problems in the financials statements, a compliance audit and fraud audit will help Whitfields internal
Answer to questions: The ethical issues involved in the Madoff case was his misconduct and deceitful activity. He lied to investors, cheated out his financial interests, and stole from thousands of people around the world. He took money from new clients and paid it out to existing clients. I don't believe that Madoff worked alone. Even if nobody helped him deceive investors, people knew about it, and the act of knowing and not reporting a white-color crime is guilty by association.
Ethicality of Accounting Activities The WorldCom case is an example of unethical behavior performed by a company by abusing accounting activities to reflect misleading financial information. In this case the main cause of this unethical behavior is greed and neglect by the executives that allowed and encouraged this behavior. On the other hand, WorldCom employee Cynthia Cooper is a prime example of ethical behavior that took place to uncover the wrong doing of individuals. Upon reading an article of a former financial analyst, Cynthia Copper’s mind was intrigued, an audit was conducted on capital spending. In the WorldCom and Cynthia Cooper case unethical behavior was evident in multiple departments and involved top key players that tried to cover up the fraud.
The ultimate goal is to protect investors. Reason Many acts of corporate corruption in the 1990s and early 2000s brought on this regulation. There were many loopholes that allowed for accounting errors without any legal incentive to correct the problem. Due to the accounting practices at companies such as Enron, Tyco, and WorldCom investors lost billions. The accounting practices created a scandal in which the companies were able to hide information from investors.
Individual assignment week 2 “Business Research Ethics” Student: Aiduleik Rodriguez Course: Business Research RES/351 22 April 2013 Instructor: Erick Ahrens Introduction The business research ethics is a topic very sensitive in today’s business world. Many companies are suffering from plagiarism, piracy, and many other unethical behaviors in different industries. Very often people see different commercials and propaganda about products or service that promise to be the perfect product for the clients. The researcher is responsible for the unethical behavior within any research, experiment or investigation. In this paper I am going to analyze an article from Ethics World website.